How to Conduct a Skills Gap Analysis

The skills gap is a hot topic in the workforce today. In almost all industries, employers often encounter difficulties hiring or retaining employees with specific skills.

Many organizations are now discovering that this skills gap is not just a problem for businesses; it also presents a significant economic threat.

The skills gap has a significant impact on the labor market. For example, it contributes to the so-called Great Resignation: A growing sense among workers that their jobs are no longer secure, and the desire to change their jobs sooner rather than later. As a result, workers are increasingly reluctant to invest in their careers.

This article will discuss the definition of skills gaps and offer a step-by-step guide to conducting your own skills gap analysis.

What is a Skills Gap?

A skills gap is the disparity between the skills possessed by the employee and the demands of the job they have been assigned to perform. Numerous factors can cause skills gaps, including technological changes, the economy, and demographic shifts. For example, as baby boomers retire, fewer workers are available to replace them. Those who remain in the workforce lack the skills required to create a culture of career agility, while millennials entering the workforce have quite different ambitions and skill sets compared to the baby boomers. As a result, there is a growing disconnect between the skills employers need and the skills their employees possess.

The skills gap has adversely affected the economy for some time. In 2016, Deloitte released a report that found the skills gap cost the U.S. economy $500 billion yearly in lost productivity. As the skills gap widens, this number will only increase.

How to Conduct a Skills Gap Analysis?

To find out if your company is affected by the skills gap, it is essential to conduct a skills gap analysis. This is a process of evaluating your employees’ skills and comparing them to the skills your company needs. Here is a step-by-step guide to conducting your own skills gap analysis:

  • Define the skills your business needs.

You will need to identify the specific skills that your company needs from its employees. Having done so, take some time to sit down with your managers and find out from them what particular skills their teams require. Once you have a list of these skills, you can begin to look for employees who possess them.

  • Evaluate the skills your employees have.

You will then need to look closely at your employees’ skills. Do they possess the specific skills your company needs? If not, what training or development do they need to acquire these skills?

  • Compare the two lists.

Once you have identified the skills your company needs and evaluated the skills your employees possess, it is time to compare the two lists. This will give you a clear picture of where the skills gap exists in your company.

  • Develop a plan to close the skills gap.

Finally, once you have identified where the skills gap is in your company, you can then develop a plan to close it. This may involve providing training and development opportunities for your employees, or even hiring new employees with the specific skills your company needs.

By conducting a skills gap analysis, you can ensure your company has the skilled employees it needs to thrive.

Skills Gap Analysis Software

There are several tools you can use to help you with your skills gap analysis. Skills management software can help you assess your employees’ skills and analyze and compare them to your requirements for vacancies or temporary replacements. This can give you a clear picture of where the skills gap exists in your company and how to close it.

One essential tool is the skills matrix. This lists your company’s specific skill requirements and identifies employees with those skills. Skills matrices are a great way to visualize the skills gap in your company and to Empower you to take the steps you need to close it.


The skills gap is a significant problem for businesses in all industries. By conducting a skills gap analysis, you can better understand your organization’s skills gap and develop a plan to close it. Skills management software can help you with your analysis.

As far as the future of work is concerned, there is no time to waste addressing the skills gap. Skills-based learning is the key to success in an ever-changing business landscape. How are you managing the skills gap? Comment below and let us know.

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